Topic: Myth vs Facts and My Assumptions about Bitcoin (Read 812 times)

 I also accidentally, when I started 2017 knowing bitcoin, at that time Hyip was so hotly discussed by influencers and YouTube made clickbait until I darkened my eyes and deposited with their tutorial because I was tempted and greedy. scam, that's sad
but that didn't stop my interest to read a lot about it. So I dedicate this thread to testing me all this time about bitcoin based on a myth that I often hear in my knowledge. and make clicks that make greedy and dark eyes, long story short I know this forum and started learning in bitcointalk about 3-4 months ago. I don't regret it
this is probably a fact because I personally also read that supply is limited and
some say it's limited, some say it will continue to grow
(at the moment) and halving every few years. every event/burning/reward block (with a deduction from each miner) maybe this is an attempt to confront bitcoin which can still be sought as natural resources.
This may be a myth and there are facts
, I haven't experienced any of the categories above/ I'm just not used to storing blocks more than in bank statements. I admit it, as discussed above, by another friend who compared institutions.
(Service per bank either transaction or convenience) with a comparison of systems in block/decentralized (bitcoin/crypto). It is difficult to accept criticism for good service (improvement) such as institutions. While bitcoin.

Of course there is a measurement value even though it is the same for transactions and stores, but the exchange rate is also very different between fiat and bitcoin.

Between myths or facts it depends on each other's experience in their perspective. Because the assessment is not the same as what each individual feels in owning, keeping, buying bitcoin. Good thread bro

Haha, you're right. But wait I'm only talking about online transaction without involving escrow and also not knowing each other, so it shouldn't be for the equivalent amount for a cup of coffee. But thanks for trying to explain.

o_e_l_e_o, I understand. 51% attacks can be done but with the risk of failure and the cost is quite expensive so that at the same time it will be something that will be difficult to do. I'm not so sure an entity can do it in the future for no apparent reason, but you're right, attacks like this don't need us to think too much about it.

I'm trying to understand something you're trying to explain about the probability of a 51% attack, which I can understand based on your description of how likely they are to reverse a confirmed transaction. Now I know that you've explained it, but considering the cost and probability of carrying out this attack is very small (a matter of time), I wouldn't think too much into it. Also, thanks for the technical explanation.

Bitcoin mining and gold mining aren't the same. When you mine gold, once the job is done, its done. You have gold and can sell your equipment because it no longer serves a purpose. Bitcoin miners continue to process transactions, so they support the existing network and allow you to validate transactions not only for new bitcoins, but also those who are 10 years old.
If we would compare this to gold mining, the machines used to mine gold would also be the ones used to clean, cut, melt, polish, weigh and count your gold.
If miners were to stop confirming transactions we'd have a drop in bitcoin's value. If the same thing were to happen with gold I'd expect the opposite effect.

Someone who owns 51% of the hashrate can reverse any transaction regardless of its confirmations, it'd just be a matter of time. They decide what's the correct chain. If they own less than that, then the more the confirmations the more difficult it becomes to catch up.

This probability can be calculated using the C code displayed in the whitepaper:

Where z is the blocks you expect to be found, q the probability for an attacker to solve those blocks and p the probability for the honest nodes to solve those blocks. Set the proportion of the hash rate and the confirmations accordingly to what you want, here: https://web.archive.org/web/20181231045818/https://people.xiph.org/~greg/attack_success.html

Here's some noteworthy results:

• With 30% of the hash rate, you have a ~62% chance to reverse a transaction with 1 confirmation.
• With 40% of the hash rate, you have a ~55% chance to reverse a transaction with 5 confirmation.
• With 20% of the hash rate, you have a ~10% chance to reverse a transaction with 3 confirmation.

Everything drops off exponentially as confirmations (z) increase. The 6 confirmations have the best security:speed ratio. It takes 1 hour, but even for someone who owns one third of the hash rate, it's improbable for their attack to succeed. (~21% chance)

The biggest "Myth" is that Bitcoin (Crypto currencies) are a "Get-Rich-Quick" scheme and this is very wrong. People see examples of other people buying tokens when the price was very low and they sell those coins for a massive profit. You are extremely lucky, if you can buy a token when the price is low and then after a few months or years.. those same tokens are worth say 800% more when you sell them. 

People are buying 1000's of worthless shitcoins for every 1 or 2 Alt coins that succeed and most of those shitcoin purchases will eat into their profits that they made with the 1 or 2 that succeeded. 

Bitcoin must not be seen as an Investment option (Commodity) ... it is simply an alternative currency, with a added trading bonus potential .. if you want to sell it later. 

If a single entity controls 51% of the hashrate (which is very unlikely), and can sustain that hashrate indefinitely (which is even more unlikely), then they can theoretically reverse a transaction with any number of confirmations. They would simply mine their own chain in secret which double spends the transaction they want to reverse, and then when their own chain is longer than the main chain they release it to the wider network. All the other nodes would now switch to this chain since it has more work, and consensus rules state the chain with the most work is the main chain. The cost of such an attack is astronomical though, and becomes larger and larger with every additional confirmation the attacker needs to overturn. No one is going to use such an attack to reverse a transaction of $1000, $10,000, or even $100,000, because it would be more profitable for them to simply mine honestly and collect the block rewards. Even if an entity has lower than 51% of the hashrate, though, they can still attempt this attack, and be successful if they get lucky. If they don't get lucky, though, then again they lose a huge amount of money by funding such an unsuccessful attack.

There's also a very unlikely scenario which could happen by chance, when two honest miners find a block at the same time, and there are competing blocks at the same height. The split will be resolved when one of the two blocks has another block found on top it, becoming the longest chain, which would eject the competing block from the mempool. If your transaction was in this competing block but not in either of the two blocks on the main chain, your transaction would go from 1 to 0 confirmations, but would almost certainly just be picked up again in the next handful of blocks to be mined.

There are also a couple of other theoretical attacks which have never been seen in the wild which could result in a transaction with 1 confirmation being ejected from the main chain, but again, these are very costly.

Think of confirmations as a continuum. It's not "x is unsafe, y is safe", but rather "1 is fine, 3 is safe, 6 is super safe", and so on. What the individual numbers are depends on your individual risk model and the size of the transaction in question.

It is not mandatory for every single transaction, it all depends on the amount of money in question. If you are selling a cup of coffee, you can safely accept a transaction with zero confirmations since the cost to attack the network to replace this transaction is significantly higher than the cost of one cup of coffee. The more valuable good you are selling, the more confirmation you should wait for to prevent being attacked this way. It also depends on the type of good you are selling, because it is pointless, for example, to wait for 100+ confirmations to transfer rights on your 5 million dollar house since the buyer of a house can't run away with it after the fake purchase occurred, which means you can always sue him in case he tries to deceive you.

Well then you are saying that literary everything else in this world that has a value is also a Ponzi scheme because that thing has gained value. For example potatoes are also Ponzi schemes since over the last year the have produced less crops and the price has gone up. Anyone who stockpiled potato (as an early adopter) is now in a huge profit!

Can you explain a bit about what the correlation between your assumptions and this thread is? I found no correlation between what you're talking about and what's being discussed in the thread so it's entirely possible that your post is off-topic which might deserve deletion. Anyway bitcoin still needs development regardless of whether satoshi is involved or not we don't really know if he is there or not.

_BlackStar, good job. You are really getting a lot of attention in this thread and you will be promoted to Sr in the near future. About Bitcoin Myths and Facts, we really can't completely get people to believe in what we can explain. The fact is that they stick to their point of view and maybe they won't change their minds and assumptions about bitcoin. Pros and Cons are always there but this thread is good for answering some doubts of people new to bitcoin not for those who hate and fight against bitcoin.

Quite interesting information, After reading the entire contents of this topic suddenly a question arose in my heart. What if satoshi appears again and what will happen.

Satoshi is unlikely to be able to take a back control of Bitcoin ongoing development.

At the beginning of the emergence of Bitcoin in 2008-2009, there was a stir because it was a mystery who was actually the person behind the creation of Bitcoin.?
To this day it is not clear who the creator of Bitcoin is, The public only knows that the pseudonym used is Satoshi Nakamoto.
If Satoshi wanted to reveal himself, I'm not sure if the idea will be wise and useful for Satoshi or Bitcoin. But I agree that if Satoshi is going to reveal himself publicly, Satoshi is unlikely to be able to take a back control of Bitcoin ongoing development.

My assumption: Bitcoin is decentralized enough to turn down Satoshi if he comes back. Bitcoin is enough, and it doesn't need a lot of derivative projects anymore. The support of countries that accept bitcoin such as El Salvador, the European Union, Australia, Canada, the United States and investors from foreign countries makes the development of bitcoin increasingly increasing.
Obviously Bitcoin does not need Satoshi presence, because without Satoshi Bitcoin can still grow, peaking on November 10, 2021 when other industries were sluggish, Bitcoin managed to hit a high (all-time high).

Of course it is mandatory in every transaction if we do it without escrow.
But I've also heard that 1 confirmation is not completely safe but it will be safer if the transaction has reached 4-5 confirmations. I forgot how confirmation was declared unsafe, maybe you still remember about that? I remember about the 51% attack, can they cancel a transaction that already has 1 confirmation?

Well, I think Bitcoin is not for everyone. At least not yet. It's okay for some people to never believe in it, just as many did not believe in the internet, email, smartphones, social media, or digital photography during the 1990s. Today, they don't believe in artificial intelligence, smart homes, self-driving cars, or Bitcoin and crypto.

Maybe in 20 years, people will look back at the bitcoin hype and shake their heads at the modern world of social media hype and instant financial transactions that are only accessible by holding a public key on a decentralized network. Or maybe they will look back and say, "Look at this crazy crap we were getting excited about back in the day!" 

Sure, because the bank is a centralized institution and the money in your account is under their control, not yours. If a bank mistakenly deposits money in to your account, then again, no money has actually moved anywhere; all that has happened is that the bank have mistakenly updated your entry on their database to show more money than you have. If you had withdrawn that money before the bank realized their mistake, then they simply would have deducted the respective amount from your remaining balance. If you had no balance remaining, then they would have come after you for outstanding debt.

With bank transfers, credit card payments, PayPal payments, etc., you can reverse the payment for up to 180 days after it has been made. It doesn't matter if the recipient has withdrawn that money and spent it already - the bank will simply take the money from the recipient's other balances or accounts. They are in control, not you.

Right, I know about that. When the mempool have a spike in transactions that can cause congested for low-fee transactions, then the fees required to get confirmation faster will also increase. RBF allows for bump fees ^{[pay higher fees while the transaction is still in 0conf state].}

Maybe you are right but only if the recipient keeps it in the bank account without spending it or withdrawing it. I once received some money in a bank account without knowing who the sender was, only a few minutes the bank withdrew the money and my balance returned to normal. They really can do it, but with bitcoin once a transaction is confirmed, it can no longer be undone unless the recipient is willing to send it back.

They are, though. When you transfer fiat electronically, the vast majority of the time all that changes immediately are the numbers you see on the screen, as your entry in the central database is updated, and no money actually moves hands for several business days. And even once the money has moved hands, it can be reversed or clawed back for months after. Bitcoin transaction can be completely finalized in 10 minutes.

Which is the case for almost any asset. If you happened to mine a ton of gold before it became popular, you make a huge profit. If you buy a bunch of land or property in a neighborhood that later becomes the next big development, you make a huge profit. If you bought Amazon or Google shares when they were still operating out of a garage, you make a huge profit. Almost any well performing asset shares this characteristic.

It is not when mempool is congested, it is when transaction has not been confirmed that you can double-spend the coin, but there is higher chance for low fee transactions to be confirmed fast when mempool is not congested.

Also bitcoin transaction should be confirmed faster than cross border fiat transactions if appropriate fee is used in accordance to mempool estimation that could get transaction confirm earlier. No third party needed, all can be done at your comfort in your home or wherever you are.

Ponzis are business that sells nothing or what what are told customers but not true, no profit from anywhere but just a means Paul is paid Peter's money and so on. No money generated from anywhere than using investors money to pay investors money and profit and when no more investors investing, the the Ponzi will collapse as usual. Many investors will lose as usual.

Bitcoin has never collapsed
Bitcoin is not a fraud, Ponzi is a fraud
Bitcoin does not promise high yield return, it is transparent and everyone knows the risk involved, but patient people and long term investors are highly likely to make profit. Ponzi schemes promise high yield return.
Bitcoin is not shady, Ponzi scheme is absolutely shady

How is Bitcoin the same as Ponzi? You are absolutely wrong.

I've tried to make assumptions about this where I think the myth of early adopters being unfairly rewarded is something that is misunderstood. Not all early adopters will get a decent return on investment as it really depends on how they use bitcoin. Great profits would be made if they were willing to hold rather than spend it. They acept it a higher risk to invest in bitcoin early, so it is not true that bitcoin deserves to be called a ponzi scheme or pyramid investment scheme.

While I 100% agree BTC is not a Ponzi scheme - unlike many in the community - I find it fascinating that Bitcoin has some things in common w/ a Ponzi scheme. For example, early adopters profiting huge as BTC goes mainstream, etc.

I'm just bad at explaining to you, actually I want to say that even though RBF allows double spending or allow us to pay higher fees when the mempool is congested then only one transaction will be confirmed ^{[a transaction with a higher fee than the first transaction].}

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Never much, just that it took me 2 days to do it because I needed to understand how the codes work. Also thank you for your appreciation.

We can't really dispel this myth among people who basically don't really know what bitcoin is. They can still understand it in a wrong way but because we have some facts, we can explain it in a right way.

Thanks for all the appreciation you gave me but what really matters is how we understand what is right about bitcoin and explain it to those who understand it the wrong way.

It will become like that until no other myth will be brought to the table since their negative speculations will be cleared in the future. Then all they will do is cause panic or some negative assumptions about it. Those people who don't believe anything about cryptocurrencies have been doing this kind of nonsense from the past until now and they don't want to stop no matter what happened.

Well done, I wish I knew half of what's written here. I bet  it took quite some time to summarize all the information into one, summarised post. I'll keep this thread bookmarked and use it as an insight for real life Bitcoin discussions, to answer your questions that I do not know how to explain correctly.

Good riddance on the merit requirement too, you'll soon become Sr Member.

Good job BlackStar, I don't know how long it took you to summarize all this from few references into a topic that is quite interesting to discuss. I really appreciate your effort.

Money cannot be separated from the way humans transact to fulfill their need, from barter, fiat money, non-cash transaction to Bitcoin which has changed world civilization. Bitcoin has made transactions easier, faster, and of course quite safe.

My assumption is that the world population will favor a faster technology, cheap and safe. The history of a bitcoin will continue, no business in the history of the world has been able to increase 40-45 thousand times in 10 years.

Not sure if that's a typo or you've misunderstood, but RBF is only possible on unconfirmed transactions, not transactions with one confirmations. Also note that although your replacement transaction might end up paying the same addresses the same amount, just with a higher fee, the new transaction is very much a brand new transaction with its own transaction hash, and is not "the same transaction".

If you wish to accept 0 confirmation transactions, then you need to ensure RBF is disabled. If you receive an RBF enabled transaction, you should wait for a minimum of 1 confirmation.

I always activate RBF for every transaction that uses an electrum wallet, this is important as an effort to anticipate if there is a mempool congestion. I've tried it many times so far and I find this feature very useful. However, regarding the issue of double spending or redirect a transactions to other wallets (own wallets or other people's wallets) it will certainly be a threat to anyone who makes buying and selling transactions without involving escrow, 0conf transactions allow transactions to be canceled or redirect a payment so that awareness about the possibility of a scam is needs to be improved by whoever does it. Traders need to get at least 1 confirmation to make it safe in most cases.

Thanks for explaining too, but I wouldn't do anything quite complicated unless absolutely necessary for the learning process or under certain circumstances.

Thanks for explaining to me about RBF as briefly as possible, but the reference you attached was great to add to my understanding of it. I read it, but unfortunately I have a lot to learn and try to understand it as best as I can because it's still quite confusing at first glance, LOL.

But I can understand the whole point of RBF and that is to allow double spending ^{[only one confirmed transaction]} and allow us to pay more fees to get fast confirmation for the same transaction.

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Anyway, for other users I hope you are not afraid to comment and give your opinion because this is a good thread to learn and hone your knowledge about bitcoin. Besides your knowledge can be useful for me it can also make you understand it more correctly. Let's discuss.

RBF in general? Loads of times. RBF to essentially cancel a payment and send coins somewhere else? Only once or twice since I'm generally very careful about where and when I send bitcoin and I don't often encounter a scenario when I would want to redirect a payment to an entirely different address.

How to do it will depend on the wallet software you use. Some, such as Electrum, give you options to bump the fee or "cancel" the transaction by double spending it back to your own wallet, but if you want to do something more complicated than that then you'll need to delete the transaction from your wallet and create a brand new one from scratch or use an external tool to create a transaction to import in to Electrum for signing.

Under certain conditions, RBF will really help anyone who wants their transactions to be confirmed faster, especially when the mempool is congested. This feature can also be used multiple times as long as the transaction still doesn't get 1 conformation, which I think is quite helpful. But about redirecting transactions to other addresses after the first transaction on broadcast, I haven't tried it until now. Maybe I'll test it in the future, but of course it should hit my wallet too.

Sorry o_e_l_e_o, have you ever done it?

RBF is described in BIP 125, which you can read here: https://github.com/bitcoin/bips/blob/master/bip-0125.mediawiki

Every time you spend bitcoin, each input in your transaction contains a 4 bit value known as nSequence. It was initially intended to be used to allow users to replace transactions in the mempool with a new transaction with a high nSequence value, but posed issues to both bandwidth and memory due to the fact no additional fees were required to replace transactions, and so it was disabled years ago. More recently, the nSequence value was repurposed for other uses. One of those uses is in relation to time locking transactions, and another one of those uses is for RBF. If you (or your wallet software) sets nSequence to either 0xffffffff or 0xfffffffe, then RBF is disabled. If you set it to any other value, RBF is enabled.

If RBF is enabled, then after you have made a transaction but before it has received its first confirmation, and it is still unconfirmed, then you can easily replace that transaction. If you spend any of the inputs from that original transaction in a new transaction, and the new transaction pays higher relative and absolute fees than the original transaction, then the original transaction will be evicted from the mempool and replaced with your new one. This allows you to make the same transaction again but with a higher fee, but also allows you to change the transaction entirely and redirect the coins to different addresses.

Of course, because we can't really convince a blind person to believe that the shirt you're wearing is green. So is the situation where we tell people to believe in bitcoin when they don't know what bitcoin is. They won't believe it until they find out.

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I can understand your point but in practice we can prove that most people don't care enough about privacy especially if they use a centralized exchange.

Although from the start I used a wallet that has the RBF feature but I really haven't tried it until now. I found the possibility of double spending based on what I've read about the functionality of the RBF feature so we are always advised to stay aware of 0conf transactions when trading between users as it is not secure, but I really don't know how it works.

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Thanks, I've considered your suggestion and now the thread is on the bitcoin discussion board.

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They want to buy, but they are afraid of loss and potential lower price. They are not people who know much about how the bitcoin market works while they want to make big profits from it. But really, that's the funniest part about being unlucky.

That is true. The transaction is never confirmed on blockchain. But I think people need to be notified, for not to be thinking once a coin appeared on their wallet, that the transaction can not be double spent. But in relation to blockchain and confirmation, bitcoin is not spent twice.

It doesn't matter, as long as you want to learn, knowledge is still very possible to be improved. You'll get it, that's a guarantee.

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This is a form of resistance from any government or organization that doesn't like bitcoin. They can say that because they don't want people to use or adopt a decentralized payment system that is not controlled by a central authority like bitcoin. You know that the government will never agree to bitcoin because they can't control it so they will definitely think of various ways to make it competitive in the future like the CBDC plan.

So far, the government has only been able to regulate users without actually being able to prevent their use as investment or trading assets. Although some countries seem to be quite strict with “crypto ban” regulations like China but that will never be able to stop this thriving bitcoin.

OP, unfortunately I don't have anything at the moment to appreciate your efforts but I'll be back and I will. This is a very well crafted thread in my opinion.

This doesn't mean the coins have been spent twice, though. I can create thousands of different transactions which all spend the same outputs, but only one of them will ever confirm.

Really, the entire term "double spend" is a misnomer. Even if a transaction is confirmed, and then a 51% attack rolls that transaction back and sends those coins to a different address, then from a blockchain point of view they have still only been spent once since the previous transaction no longer exists in the main chain.

Great writeup!

And a brand new feature: Their possession can be divided with multi-sig!

While I get your point, it is correct to say that it's backed by processing power. Backed by, besides pegged to, means that it's supported from. And Bitcoin is supported from computational power.

But, yeah, avoid saying that it's backed by it, 'cause it brings confusion.

Even if it did, I honestly prefer having a decent percentage of people evading taxes than be forced to use a currency of a system that is designed to corrupt at some point in the future. I mean, who's going to protect me from the mess coming? Just stick to Bitcoin, which is a better type of sound money, and sleep easy.

Concerning the early adopters.
It can be said that they were unfairly rewarded. But that is the reward of an early bird who catches the fattest worm. Meanwhile, if bitcoin was to be a perpetual failure, the early adopters would have also lost hugely.
In crypto, the early adopters always have high returns. So, bitcoin being the king is not an exception.

The kind of people who say that expect the State to solve their problems instead of taking the initiative to solve them themselves. As if getting into mining in 2011 or buying Bitcoin had no merit. They dream of equalizing what is not equal, because if today all the wealth were distributed equally among all the inhabitants of the earth, tomorrow there would be rich and poor again.

Nor do they want to learn that Bitcoin was created precisely to free us from the clutches of the State (and central banks), not to depend on it.

Not completely blindly though. A SPV client will still verify everything there is to a bitcoin block header and also can fetch merkle trees and verify existence of a transaction in a block. They can also connect to multiple full nodes and monitor the situation with the bitcoin network (forks, stale blocks, reorgs,...) and know whether the block it has are still part of the chain or not.

This is not a light-wallet specific problem. A 51% attack affects full nodes and SPV clients the same. And invalid transactions ("infinite coins") are not part of the valid chain anyways and both full nodes (by full verification) and SPV clients (by querying multiple nodes and following the longest header chain) will recognize it.

I'd like to point out that I've been hearing this statement from different users ever since 2014 that I got involved with bitcoin and they will repeat it in the future too. Funny thing is that if they bought bitcoin in 2014-2015 instead of nagging they would have bought it at about $400 and now the price is about $40,000 which is 100 times higher.
Funnier thing is that those who are nagging today and not buying bitcoin will complain in the near future when price is $400,000!

Good job _BlackStar, I think I deserve merit  your post. Anyway, 2 of all the points you raised in the thread are still very much felt today especially about ponzi schemes and pyramid schemes. I think the ordinary people still needs to learn more about bitcoin and compare it to ponzi investments and other pyramid scheme investments so they can determine whether bitcoin is worth equating with these two scam investments or not.

I have found people who have a mindset about bitcoin in real life and I have also had the opportunity to tell them about the basic knowledge of bitcoin investing and what bitcoin is. But I never force them to believe because basically bitcoin is just a scapegoat between two scam investment schemes.

Instead of being on a beginner's board, why don't you move this thread to a bitcoin discussion board? I think you will get a lot of quality posters there especially those who care enough about bitcoin.

Bitcoin is semi anonymous or pseudonymous, all transactions are transparent on blockchain but might not be linked to people that make the transaction.

But people can use bitcoin anonymously or can also prefer to maintain privacy.

How about replace-by-fee (RBF), this is double spend. For example, I transfer bitcoin to someone with RBF enabled, if the transaction is not yet confirmed, I can double spend the coin by either cancelling the broadcasted transaction back into another address on my wallet with a higher fee, or by sending it to another new address on another wallet with high fee. But this only applies to transactions in which RBF is enabled.

The reason it is recommended to accept transaction that has been confirmed to avoid scam.

Even if tax evasion is possible using bitcoin, it is because it is possible while using fiat.

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I have no smerit left, I would have merited your post.[/list]

This kind of myth's is not totally avoidable or new since people think negative on new things discover especially if we talk about finance and investment. But what good thing here is we have venue like bitcointalk to discuss such many topics where people can get enlightenment on how this one really works and correct what they think wrong about bitcoin like they think its a ponzi or other forms of frauds.

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I'm a new user who knows bitcoin since 2020. I don't have much knowledge about bitcoin, but that doesn't stop my interest to read a lot about it. So I dedicate this thread to test my knowledge so far about bitcoin based on a myth that I often hear in the community.

Before you read and comment on this thread, let me say first that this is a learning endeavor which may be very important for all beginners in this forum to know ^{[including me].} I've read it a few times and it can broaden my knowledge to learn more about bitcoin, but I'm sure many beginners have never heard of it. All content in this thread is available here. I've just picked up a few key points that I think I still hear a lot to this day, so here are my assumptions about the myths going around.

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• Bitcoin is just like all other digital currencies; nothing new
• Bitcoins don't solve any problems that fiat currency and/or gold doesn't solve
• Miners, developers or some other entity could change Bitcoin's properties to benefit themselves
• Bitcoin is backed by processing power
• Bitcoin is illegal because it's not legal tender
• Bitcoin will only enable tax evaders which will lead to the eventual downfall of civilization
• Early adopters are unfairly rewarded
• It's a giant Ponzi scheme
• Bitcoin is a pyramid scheme
• Bitcoin was hacked
• References

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Bitcoin is just like all other digital currencies; nothing new

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Nearly all other digital currencies are centrally controlled. This means that:

• They can be printed at the subjective whims of the controllers
• They can be destroyed by attacking the central point of control
• Arbitrary rules can be imposed upon their users by the controllers

Being decentralized, Bitcoin solves all of these problems.

My assumption: Bitcoin's decentralization has answered all doubts about why this currency is different from other digital currencies. The average digital currency is a centralized currency which has become the basis of the difference between the two.


Bitcoins don't solve any problems that fiat currency and/or gold doesn't solve

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Unlike gold, bitcoins are:

• Easy to transfer
• Easy to secure
• Easy to verify
• Easy to granulate

Unlike fiat currencies, bitcoins are:

• Predictable and limited in supply
• Not controlled by a central authority (such as The United States Federal Reserve)
• Not debt-based

Unlike electronic fiat currency systems, bitcoins are:

• Potentially anonymous
• Freeze-proof
• Faster to transfer
• Cheaper to transfer

My assumption: All the advantages that exist in bitcoin we can find from how bitcoin innovation is explained. The bitcoin innovation differs from the fiat system in that it is not the same as other assets such as gold, fiat currency and electronic fiat currency systems. One of the easiest things to find is transaction fees and they are not controlled by any central authority.


Miners, developers or some other entity could change Bitcoin's properties to benefit themselves

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Bitcoin's properties cannot be illegitimately changed as long as most of bitcoin's economy uses full node wallets. Transactions are irreversible and uncensorable as long as no single coalition of miners has more than 50% hash power and the transactions have an appropriate number of confirmations.

Bitcoin requires certain properties to be enforced for it to be a good form of money, for example:

• Nobody ever created money out of nothing (except for miners, and only according to a well-defined schedule).
• Nobody ever spent coins without knowing their private key.
• Nobody spent the same coin twice
• Nobody violated any of the other tricky rules that are needed to make the system work (difficulty, proof of work, DoS protection, ...).

These rules define bitcoin. A full node is software that verifies the rules of bitcoin. Any transaction which breaks these rules is not a valid bitcoin transaction and would be rejected in the same way that a careful goldsmith rejects fool's gold.

Full node wallets should be used by any intermediate bitcoin user or above and especially bitcoin businesses. Therefore anybody attempting to create bitcoins with invalid properties will find themselves being rejected by any trading partners. Note that lightweight wallets and web wallets do not have the low-trust benefits of full node wallets. Lightweight (SPV) wallets will blindly trust the miners, meaning if 51% of miners printed infinite coins or spent the same coin twice then lightweight wallet users would happily accept these fake bitcoins as payment. Web wallets blindly trust the web server which could display anything at all.

Miners are required to choose between multiple valid transaction histories. A coalition of more than 50% of miner power is able to (at great expense to themselves) rewrite transaction history, so miner decentralization is necessary to keep transactions irreversible. Miners burn a lot of electrical power in the mining process so they must constantly be trading their bitcoin income in order to pay bills. This makes miners utterly dependent on the bitcoin economy at large and therefore gives them a strong incentive to mine valid bitcoin blocks that full nodes will accept as payment.

Influential figures in the community (such as developers, politicians or investors) may try to use their influence to convince people to download and run modified full node software which changes bitcoin's properties in illegitimate ways. This is unlikely to succeed as long as counterarguments can freely spread through the media, internet forums and chatrooms. Many bitcoin users do not follow the bitcoin forums on a regular basis or even speak English. All appeals to run alternative software should be looked at critically for whether the individual agrees with the changes being proposed. Full node software should always be open source so any programmer can examine the changes for themselves. Because of the co-ordination problem, there is usually a strong incentive to stick with the status quo.

See also: Full_node#Economic_strength See also this blog post: Who Controls Bitcoin?

My assumption: In the first paragraph above it seems pretty clear that the idea of ​​developers and miners changing bitcoin properties for their own benefit is never true. I don't have a lot of assumptions and knowledge about this as I don't know much about developers or miners, but a 50% hash power attack would be really tough because of the competition so the fear is very vague.


Bitcoin is backed by processing power

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It is not correct to say that Bitcoin is "backed by" processing power. A currency being "backed" means that it is pegged to something else via a central party at a certain exchange rate yet you cannot exchange bitcoins for the computing power that was used to create them. Bitcoin is in this sense not backed by anything. It is a currency in its own right. Just as gold is not backed by anything, the same applies to Bitcoin.

The Bitcoin currency is created via processing power, and the integrity of the block chain is protected by the existence of a network of powerful computing nodes from certain attacks.

My assumption: Created does not mean backed. Bitcoin will still be decentralized by itself without being backed by anything. Gold is one of the closest assets if one wants to compare it about backed.


Bitcoin is illegal because it's not legal tender

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In March 2013, the U.S. Financial Crimes Enforcement Network issues a new set of guidelines on "de-centralized virtual currency", clearly targeting Bitcoin. Under the new guidelines, "a user of virtual currency is not a Money Services Businesses (MSB) under FinCEN's regulations and therefore is not subject to MSB registration, reporting, and record keeping regulations." Miners, when mining bitcoins for their own personal use, aren't required to register as a MSB or Money Transmitter.

In general, there are a number of currencies in existence that are not official government-backed currencies. A currency is, after all, nothing more than a convenient unit of account. While national laws may vary from country to country, and you should certainly check the laws of your jurisdiction, in general trading in any commodity, including digital currency like Bitcoin, BerkShares, game currencies like WoW gold, or Linden dollars, is not illegal.

My assumption: Bitcoin is not illegal as a currency but you have to comply with your government regulations if you want to use it as a means of payment. Every country has different regulations regarding bitcoin, but most of them don't make it illegal. El Salvador is one of the countries that have adopted bitcoin as a legal currency.


Bitcoin will only enable tax evaders which will lead to the eventual downfall of civilization

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Cash transactions offer an increased level of anonymity, yet are still taxed successfully. It is up to you to follow the applicable tax laws in your home country, or face the consequences.

While it may be easy to transfer bitcoins pseudonymously, spending them on tangibles is just as hard as spending any other kind of money anonymously. Tax evaders are often caught because their lifestyle and assets are inconsistent with their reported income, and not necessarily because government is able to follow their money.

Finally, the Bitcoin block chain is a permanent record of all transactions, meaning it can be mined for info at any time in the future making investigation, tracing of funds, etc much easier than with other forms of payment.

My assumption: Doing tax evaders with bitcoin is possible because bitcoin can be spent pseudonymously or with a high degree of anonymity. But in many cases the government may detect tax evaders and investigate possible evasion because the lifestyle does not match the financial statements they receive. I've also created a thread on this, so maybe you can also find some opinions on how rules and evaders are hard to do.


Early adopters are unfairly rewarded

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Early adopters are rewarded for taking the higher risk with their time and money. The capital invested in bitcoin at each stage of its life invigorated the community and helped the currency to reach subsequent milestones. Arguing that early adopters do not deserve to profit from this is akin to saying that early investors in a company, or people who buy stock at a company IPO (Initial Public Offering), are unfairly rewarded.

This argument also depends on bitcoin early adopters using bitcoins to store rather than transfer value. The daily trade on the exchanges (as of Jan 2012) indicates that smaller transactions are becoming the norm, indicating trade rather than investment. In more pragmatic terms, "fairness" is an arbitrary concept that is improbable to be agreed upon by a large population. Establishing "fairness" is no goal of Bitcoin, as this would be impossible.

Looking forwards, considering the amount of publicity bitcoin received as of April 2013, there can be no reasonable grounds for complaint for people who did not invest at that time, and then see the value (possibly) rising drastically higher.

By starting to mine or acquire bitcoins today, you too can become an early adopter.

My assumption: It is clear that anyone who dares to take the risk of investing early will be rewarded for what they have invested. But not all early adopters could get the huge profits they are today if they spent their bitcoins instead of keeping them. Remember how much bitcoin for 2 pizzas price? But of course it's never too late to adopt bitcoin even though it's currently $40K or more. Bitcoin is a risky investment but well worth the return. There are no guarantees, this is just a habit that has happened in the history of bitcoin.


It's a giant Ponzi scheme

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In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A Ponzi scheme is a zero sum game. In a Ponzi scheme, early adopters can only profit at the expense of late adopters, and the late adopters always lose. Bitcoin can have a win-win outcome. Earlier adopters profit from the rise in value as Bitcoin becomes better understood and in turn demanded by the public at large. All adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.

It is also important to note that Satoshi Nakamoto, creator of bitcoin, has never spent a bitcoin (other than giving them away when they were worthless) which we can verify by checking the blockchain.

My assumption: Since I know about bitcoin in 2020 then I never got any guarantee that bitcoin will guarantee a bigger return. However, price fluctuations as well as the influence of supply and demand have made holders benefit. This is not a ponzi scheme and one needs to take a closer look at what bitcoin really is before they determine that this is a ponzi scheme.


Bitcoin is a pyramid scheme

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Bitcoin is nearly opposite of a pyramid scheme in a mathematical sense. Because Bitcoins are algorithmically made scarce, no exponential benefit is derived from introducing new users to use of it. There is a quantitative benefit in having additional interest or demand, but this is in no way exponential.

My assumption: Bitcoin doesn't need this way to get a lot of users. Each user can get their own profit according to the amount of investment they want to make. You may be recruited by people who have business interests in the name of bitcoin like many investment platforms today where you become a referral member of people who take advantage of your member status. Bitcoin doesn't require this as you are free to make any purchases based on your current financial capabilities, P2P or centralized exchanges are a great place for you to buy and invest in bitcoin.


Bitcoin was hacked

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In the history of Bitcoin, there has never been an attack on the block chain that resulted in stolen money from a confirmed output. Neither has there ever been a reported theft resulting directly from a vulnerability in the original Bitcoin client, or a vulnerability in the protocol. Bitcoin is secured by standard cryptographic functions. These functions have been peer reviewed by cryptography experts and are considered unlikely to be breakable in the foreseeable future.

It is safe to say that the currency itself has never been 'hacked'. However, several major websites using the currency have been hacked, often resulting in high profile Bitcoin heists. These heists are misreported in some media as hacks on Bitcoin itself. An analogy: just because someone stole US dollars from a supermarket till, doesn’t mean that the US dollar as a currency has been 'hacked'.

Most bitcoin thefts are the result of inadequate wallet security. In response to the wave of thefts in 2011 and 2012, the community has developed risk-mitigating measures such as wallet encryption, support for multiple signatures, offline wallets, paper wallets, and hardware wallets. As these measures gain adoption by merchants and users, the number of thefts drop.


My assumption: Bitcoin are not hacked, but hackers manage to hack users or trading platforms due to weak security systems or security practices by users. Usually hackers take advantage of this weakness to steal bitcoins either from users or trading platforms, so this is another risk that users need to be aware of so that they can practice good security for their bitcoin. The best ever recommended standard for storing bitcoin is a hardware wallet.

References

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1. https://en.bitcoin.it/wiki/Main_Page
2. https://en.bitcoin.it/wiki/Myths
3. https://bitcoin.org/en/